Exhibit 10.2


 


VARIAN MEDICAL SYSTEMS, INC.


 


2000 STOCK PLAN


 


(Amended and restated to reflect the July 30, 2004
two-for-one stock split)


 

















 


TABLE OF CONTENTS


 


	
  SECTION 1

  	
  BACKGROUND, PURPOSE
  AND DURATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Effective Date

  	
   

  
	
   

  	
  1.2

  	
  Purpose of the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  “1934 Act”

  	
   

  
	
   

  	
  2.2

  	
  “Affiliate”

  	
   

  
	
   

  	
  2.3

  	
  “Award”

  	
   

  
	
   

  	
  2.4

  	
  “Award Agreement”

  	
   

  
	
   

  	
  2.5

  	
  “Board”

  	
   

  
	
   

  	
  2.6

  	
  “Code”

  	
   

  
	
   

  	
  2.7

  	
  “Committee”

  	
   

  
	
   

  	
  2.8

  	
  “Company”

  	
   

  
	
   

  	
  2.9

  	
  “Consultant”

  	
   

  
	
   

  	
  2.10

  	
  “Disability”

  	
   

  
	
   

  	
  2.11

  	
  “Employee”

  	
   

  
	
   

  	
  2.12

  	
  “Exercise Price”

  	
   

  
	
   

  	
  2.13

  	
  “Fair Market Value”

  	
   

  
	
   

  	
  2.14

  	
  “Fiscal Year”

  	
   

  
	
   

  	
  2.15

  	
  “Grant Date”

  	
   

  
	
   

  	
  2.16

  	
  “Non-qualified Stock Option”

  	
   

  
	
   

  	
  2.17

  	
  “Option”

  	
   

  
	
   

  	
  2.18

  	
  “Participant”

  	
   

  
	
   

  	
  2.19

  	
  “Performance Period”

  	
   

  
	
   

  	
  2.20

  	
  “Performance Share”

  	
   

  
	
   

  	
  2.21

  	
  “Performance Unit”

  	
   

  
	
   

  	
  2.22

  	
  “Period of Restriction”

  	
   

  
	
   

  	
  2.23

  	
  “Plan”

  	
   

  
	
   

  	
  2.24

  	
  “Restricted Stock”

  	
   

  
	
   

  	
  2.25

  	
  “Retirement”

  	
   

  
	
   

  	
  2.26

  	
  “Shareholder Return”

  	
   

  
	
   

  	
  2.27

  	
  “Shares”

  	
   

  
	
   

  	
  2.28

  	
  “Stock Appreciation Right”

  	
   

  
	
   

  	
  2.29

  	
  “Subsidiary”

  	
   

  
	
   

  	
  2.30

  	
  “Termination of Service”

  	
   

  
	
   

  	
  2.31

  	
  “VAI”

  	
   

  



 


i

















 


	
  SECTION 3

  	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  The Committee

  	
   

  
	
   

  	
  3.2

  	
  Authority of the Committee

  	
   

  
	
   

  	
  3.3

  	
  Delegation by the Committee

  	
   

  
	
   

  	
  3.4

  	
  Decisions Binding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
  SHARES SUBJECT TO THE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Number of Shares

  	
   

  
	
   

  	
  4.2

  	
  Lapsed Awards

  	
   

  
	
   

  	
  4.3

  	
  Adjustments
  in Awards and Authorized Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
  STOCK OPTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Grant of Options

  	
   

  
	
   

  	
  5.2

  	
  Award Agreement

  	
   

  
	
   

  	
  5.3

  	
  Exercise Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.3.1

  	
  Substitute
  Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Expiration of Options.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.4.1

  	
  Expiration Dates

  	
   

  
	
   

  	
   

  	
  5.4.2

  	
  Death
  of Participant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Exercisability of Options

  	
   

  
	
   

  	
  5.6

  	
  Payment

  	
   

  
	
   

  	
  5.7

  	
  Restrictions on
  Share Transferability

  	
   

  
	
   

  	
  5.8

  	
  Grant of Reload Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
  STOCK APPRECIATION RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Grant of SARs

  	
   

  
	
   

  	
  6.2

  	
  Exercise Price and Other
  Terms

  	
   

  
	
   

  	
  6.3

  	
  SAR Agreement

  	
   

  
	
   

  	
  6.4

  	
  Expiration of SARs

  	
   

  
	
   

  	
  6.5

  	
  Payment of SAR Amount

  	
   

  
	
   

  	
  6.6

  	
  Payment Upon Exercise of
  SAR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  	
  RESTRICTED
  STOCK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Grant of Restricted Stock

  	
   

  
	
   

  	
  7.2

  	
  Restricted Stock Agreement

  	
   

  
	
   

  	
  7.3

  	
  Transferability

  	
   

  
	
   

  	
  7.4

  	
  Other Restrictions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.1

  	
  General
  Restrictions

  	
   

  
	
   

  	
   

  	
  7.4.2

  	
  Legend
  on Certificates

  	
   

  



 


ii

















 


	
   

  	
  7.5

  	
  Removal of Restrictions

  	
   

  
	
   

  	
  7.6

  	
  Voting Rights

  	
   

  
	
   

  	
  7.7

  	
  Dividends and Other
  Distributions

  	
   

  
	
   

  	
  7.8

  	
  Return of Restricted
  Stock to Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8

  	
  PERFORMANCE
  UNITS AND PERFORMANCE SHARES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Grant of
  Performance Units and Shares

  	
   

  
	
   

  	
  8.2

  	
  Initial Value

  	
   

  
	
   

  	
  8.3

  	
  Performance
  Objectives and Other Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.3.1

  	
  General Performance
  Objectives

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Earning
  of Performance Units and Performance Shares

  	
   

  
	
   

  	
  8.5

  	
  Form and Timing of Payment

  	
   

  
	
   

  	
  8.6

  	
  Cancellation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  No Effect on
  Employment or Service

  	
   

  
	
   

  	
  9.2

  	
  Participation

  	
   

  
	
   

  	
  9.3

  	
  Indemnification

  	
   

  
	
   

  	
  9.4

  	
  Successors

  	
   

  
	
   

  	
  9.5

  	
  Beneficiary Designations

  	
   

  
	
   

  	
  9.6

  	
  Nontransferability of
  Awards

  	
   

  
	
   

  	
  9.7

  	
  No Rights as Stockholder

  	
   

  
	
   

  	
  9.8

  	
  Withholding Requirements

  	
   

  
	
   

  	
  9.9

  	
  Withholding Arrangements

  	
   

  
	
   

  	
  9.10

  	
  Deferrals

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10

  	
  AMENDMENT,
  TERMINATION AND DURATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Amendment,
  Suspension or Termination

  	
   

  
	
   

  	
  10.2

  	
  Duration of the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11

  	
  LEGAL
  CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Gender and Number

  	
   

  
	
   

  	
  11.2

  	
  Severability

  	
   

  
	
   

  	
  11.3

  	
  Requirements of Law

  	
   

  
	
   

  	
  11.4

  	
  Governing Law

  	
   

  
	
   

  	
  11.5

  	
  Captions

  	
   

  
					



 


iii

















 


VARIAN MEDICAL SYSTEMS, INC.


2000 STOCK OPTION PLAN


(as amended and restated to reflect the July 30, 2004
two-for-one stock split)


 


SECTION 1

BACKGROUND,
PURPOSE AND DURATION


 


1.1                                 Effective Date. 
This Plan is effective as of November 17, 2000.


 


1.2                                 Purpose of the Plan.  The
Plan is intended to increase incentives and to encourage Share ownership on the
part of (1) employees of the Company and its Affiliates, (2) consultants who
provide significant services to the Company and its Affiliates.  The Plan also is intended to further the
growth and profitability of the Company.


 


SECTION 2

DEFINITIONS


 


The following words and
phrases shall have the following meanings unless a different meaning is plainly
required by the context:


 


2.1                                 “1934 Act” means the Securities
Exchange Act of 1934, as amended. 
Reference to a specific section of the 1934 Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such
section or regulation.


 


2.2                                 “Affiliate” means any corporation or
any other entity (including, but not limited to, partnerships and joint
ventures) controlling, controlled by, or under common control with the Company.


 


2.3                                 “Award” means, individually or
collectively, a grant under the Plan of Non-qualified Stock Options.


 


2.4                                 “Award Agreement” means the written
agreement setting forth the terms and provisions applicable to each Award
granted under the Plan.


 


2.5                                 “Board” means the Board of Directors
of the Company.


 


2.6                                 “Code” means the Internal Revenue Code
of 1986, as amended.  Reference to a
specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.


 


2.7                                 “Committee” means the committee
appointed by the Board (pursuant to Section 3.1) to administer the Plan.


 


2.8                                 “Company” means Varian Medical
Systems, Inc., a Delaware corporation, or any successor thereto.


 


2.9                                 “Consultant” means any consultant,
independent contractor, or other person who provides significant services to
the Company or its Affiliates, but who is neither an Employee nor a member fo
the Company’s Board of Directors.


 


2.10                           “Disability” means a permanent and
total disability within the meaning of section 22(e)(3) of the Code,
provided that in the case of Awards other than Incentive Stock Options, the
Committee in its


 

















 


discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.


 


2.11                           “Employee” means any employee of the
Company or of an Affiliate, whether such employee is so employed at the time
the Plan is adopted or becomes so employed subsequent to the adoption of the
Plan who is neither an officer (as designated by the Company’s Board of
Directors) nor a director of the Company.


 


2.12                           “Exercise Price” means the price at
which a Share may be purchased by a Participant pursuant to the exercise of an
Option.


 


2.13                           “Fair Market Value” means the last
quoted per share selling price for Shares on the relevant date, or if there
were no sales on such date, the arithmetic mean of the highest and lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as determined by the Committee. 
Notwithstanding the preceding, for federal, state and local income tax
reporting purposes, fair market value shall be determined by the Committee in
accordance with uniform and nondiscriminatory standards adopted by it from time
to time.


 


2.14                           “Fiscal Year” means the fiscal year of
the Company.


 


2.15                           “Grant Date” means, with respect to an
Award, the date that the Award was granted.


 


2.16                           “Non-qualified Stock Option” means an
option to purchase Shares which is intended to meet the requirements of
section 422 of the Code .


 


2.17                           “Option” means a Non-qualified Stock
Option.


 


2.18                           “Participant” means an Employee or
Consultant who has an outstanding Award.


 


2.19                           “Performance Period” means any fiscal
period not to exceed three consecutive Fiscal Years, as determined by the
Committee in its sole discretion.


 


2.20                           “Performance Share” means a
Performance Share granted to a Participant pursuant to Section 8.


 


2.21                           “Performance Unit” means a Performance
Unit granted to a Participant pursuant to Section 8.


 


2.22                           “Period of Restriction” means the
period during which shares of Restricted Stock are subject to forfeiture and/or
restrictions on transferability.


 


2.23                           “Plan” means the Varian Medical
Systems, Inc. 2000 Stock Plan, as set forth in this instrument and as hereafter
amended from time to time.


 


2.24                           “Restricted Stock” means an Award
granted to a Participant pursuant to Section 7.


 


2.25                           “Retirement” means, in the case of an
Employee or a Non-employee Director, “Retirement” as defined pursuant to the
Company’s or the Board’s Retirement Policies, as they may be established from
time to time.  With respect to a
Consultant, no Termination of Service shall be deemed to be on account of
“Retirement.”


 


2.26                           “Shareholder Return” means as to any
Performance Period, the total return (change in share price plus reinvestment
of any dividends) of a Share.


 


2.27                           “Shares” means shares of the Company’s
common stock, $1.00 par value.


 


5

















 


2.28                           “Stock Appreciation Right” or “SAR”
means an Award, granted alone, in connection or in tandem with a related
Option, that pursuant to Section 6 is designated as a SAR.


 


2.29                           “Subsidiary” means any corporation in
an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.


 


2.30                           “Termination of Service” means (a) in
the case of an Employee, a cessation of the employee-employer relationship
between an Employee and the Company or an Affiliate for any reason, including,
but not by way of limitation, a termination by resignation, discharge, death,
Disability, Retirement, or the disaffiliation of an Affiliate, but excluding
any such termination where there is a simultaneous reemployment by the Company
or an Affiliate; (b) in the case of a Consultant, a cessation of the service
relationship between a Consultant and the Company or an Affiliate for any
reason, including, but not by way of limitation, a termination by resignation,
discharge, death, Disability, or the disaffiliation of an Affiliate, but
excluding any such termination where there is a simultaneous re-engagement of
the consultant by the Company or an Affiliate.


 


2.31                           “VAI” means Varian Associates, Inc., a
Delaware corporation.


 


SECTION 3

ADMINISTRATION


 


3.1                                 The Committee.  The
Plan shall be administered by the Committee which shall consist of not less
than two (2) Directors. As of the effective date of the Plan the Plan shall be
administered by the Stock Grant Committee of the Board.


 


3.2                                 Authority of the Committee.  It
shall be the duty of the Committee to administer the Plan in accordance with
the Plan’s provisions.  The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees and Consultants shall be granted Awards, (b)
prescribe the terms and conditions of the, (c) interpret the Plan and the
Awards, (d) adopt such procedures and subplans as are necessary or appropriate
to permit participation in the Plan by Employees and Consultants who are
foreign nationals or employed outside of the United States, (e) adopt rules for
the administration, interpretation and application of the Plan as are
consistent therewith, and (f) interpret, amend or revoke any such rules.  Notwithstanding any contrary provision of
the Plan, the Committee may reduce the amount payable under any Award (other
than an Option) after the grant of such Award.


 


3.3                                 Delegation by the Committee.  The
Committee, in its sole discretion and on such terms and conditions as it may provide,
may delegate all or any part of its authority and powers under the Plan to one
or more directors and/or officers of the Company.


 


3.4                                 Decisions Binding.  All
determinations and decisions made by the Committee, the Board, and any delegate
of the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum
deference permitted by law.


 


SECTION 4

SHARES
SUBJECT TO THE PLAN


 


4.1                                 Number of Shares. 
Subject to adjustment as provided in Section 4.3, the total number
of Shares available for grant under the Plan shall not exceed 3,741,946, plus
such number of Shares as are granted pursuant to substitute Options under
Sections 5.3.1.  Shares granted under
the Plan may be either authorized but unissued Shares or treasury Shares.


 


6

















 


4.2                                 Lapsed Awards.  If
an Award terminates, expires, or lapses for any reason, any Shares subject to
such Award again shall be available to be the subject of an Award. In addition,
if any Shares are tendered to the Company (whether by physical delivery or
attestation) as full or partial payment for the exercise of an Option or in
satisfaction of a tax withholding obligation pursuant to an Award, only the net
Shares issued shall be deemed granted for purposes of determining the maximum
number of Shares that may be granted under Section 4.1.  Also, Shares granted pursuant to Awards
assumed or granted in substitution of other awards in connection with the
acquisition by the Company of an unrelated entity shall not reduce the maximum
number of Shares issuable under Section 4.1.


 


4.3                                 Adjustments in Awards and Authorized Shares.  In
the event of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, Share combination, or other
change in the corporate structure of the Company affecting the Shares, the
Committee shall adjust the number and class of Shares which may be delivered
under the Plan, the number, class, and price of Shares subject to outstanding
Awards, in such manner as the Committee (in its sole discretion) shall
determine to be appropriate to prevent the dilution or diminution of such
Awards. Notwithstanding the preceding, the number of Shares subject to any
Award always shall be a whole number.


 


SECTION 5

STOCK OPTIONS


 


5.1                                 Grant of Options. 
Subject to the terms and provisions of the Plan, Options may be granted
to Employees and Consultants at any time and from time to time as determined by
the Committee in its sole discretion. 
The Committee, in its sole discretion, shall determine the number of
Shares subject to each Option.


 


5.2                                 Award Agreement. 
Each Option shall be evidenced by an Award Agreement that shall specify
the Exercise Price, the expiration date of the Option, the number of Shares to
which the Option pertains, any conditions to exercise of the Option, and such
other terms and conditions as the Committee, in its discretion, shall
determine.  The Award Agreement shall
specify whether the Option is intended to be an Incentive Stock Option or a
Non-qualified Stock Option.


 


5.3                                 Exercise Price. The Exercise Price for each Option shall be
determined by the Committee in its sole discretion.


 


5.3.1                        Substitute
Options. 
Notwithstanding the provisions of this Section 5.3.1 , in the event
that the Company or an Affiliate consummates a transaction described in
section 424(a) of the Code (e.g., the acquisition of property or stock
from an unrelated corporation), persons who become Employees or Consultants on
account of such transaction may be granted Options in substitution for options
granted by their former employer.  If
such substitute Options are granted, the Committee, in its sole discretion and
consistent with section 424(a) of the Code, shall determine the exercise
price of such substitute Options.


 


5.4                                 Expiration of Options. The Committee, in its sole discretion, (a)
shall provide in each Award Agreement when each Option expires and becomes
unexercisable, and (b) may, after an Option is granted and before such Option
expires, extend the maximum term of the Option.


 


5.4.1                        Expiration
Dates. 
Each Option shall terminate no later than the first to occur of the
following events:


 


(a)                                  The expiration of ten (10) years from the
Grant Date; or


 


(b)                                 The expiration of three (3) months from the
date of the Participant’s Termination of Service for a reason other than the
Participant’s death, Disability or Retirement; or


 


(c)                                  The expiration of one (1) year from the date
of the Participant’s Termination of Service by reason of Disability; or


 


7

















 


(d)                                 The expiration of three (3) years from the
date of the Participant’s Retirement; or


 


(e)                                  The date of the Participant’s Termination of
Service by the Company for cause (as determined by the Company); or


 


(f)                                    The date for termination of the Option
determined by the Committee in its sole discretion and set forth in the written
Award Agreement.


 


5.4.2                        Death of
Participant. 
Notwithstanding Section 5.4.1, if a Participant who is an Employee
dies prior to the expiration of his or her Options, his or her Options shall be
exercisable until the expiration of three (3) years after the date of
death.  If a Participant who is a
Consultant dies prior to the expiration of his or her Options, the Committee,
in its discretion, may provide that his or her Options shall be exercisable for
up to three (3) years after the date of death.


 


5.5                                 Exercisability of Options. 
Options granted under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall determine in
its sole discretion.  After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option.  If a
Participant dies while an Employee, the exercisability of his or her Options
shall be fully accelerated to the date of Termination of Service.


 


5.6                                 Payment.  Options shall be exercised by
the Participant’s delivery of a written notice of exercise to the Secretary of
the Company (or its designee), setting forth the number of Shares with respect
to which the Option is to be exercised, accompanied by full payment for the
Shares.


 


Upon the exercise of any
Option, the Exercise Price shall be payable to the Company in full in cash or
its equivalent.  The Committee, in its
sole discretion, also may permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Exercise Price, or (b) by any other means which the Committee, in its
sole discretion, determines to both provide legal consideration for the Shares,
and to be consistent with the purposes of the Plan.


 


As soon as practicable after
receipt of a written notification of exercise and full payment for the Shares
purchased, the Company shall deliver to the Participant (or the Participant’s
designated broker), Share certificates (which may be in book entry form)
representing such Shares.


 


5.7                                 Restrictions on Share Transferability.  The
Committee may impose such restrictions on any Shares acquired pursuant to the
exercise of an Option as it may deem advisable, including, but not limited to,
restrictions related to applicable Federal securities laws, the requirements of
any national securities exchange or system upon which Shares are then listed or
traded, or any blue sky or state securities laws.


 


5.8                                 Grant of Reload Options.  The
Committee may provide in an Award Agreement that a Participant who exercises
all or part of an Option by payment of the Exercise Price with already-owned Shares,
shall be granted an additional option (a “Reload Option”) for a number of
shares of stock equal to the number of Shares tendered to exercise the
previously granted Option plus, if the Committee so determines, any Shares
withheld or delivered in satisfaction of any tax withholding requirements.  As determined by the Committee, each Reload
Option shall (a) have a Grant Date which is the date as of which the previously
granted Option is exercised, and (b) be exercisable on the same terms and
conditions as the previously granted Option, except that the Exercise Price
shall be determined as of the Grant Date.


 


8

















 


SECTION 6

STOCK
APPRECIATION RIGHTS


 


6.1                                 Grant of SARs. 
Subject to the terms and conditions of the Plan, SARs may be granted to
Employees and Consultants at any time and from time to time as shall be
determined by the Committee, in its sole discretion.  The Committee shall have complete discretion to determine the
number of SARs granted to any Participant, provided that during any Fiscal
Year, no Participant shall be granted SARs covering more than 4,000,000 Shares.


 


6.2                                 Exercise Price and Other Terms.  The
Committee, subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted under the
Plan.  However, the exercise price of an
SAR shall be not less than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date.


 


6.3                                 SAR Agreement. 
Each SAR grant shall be evidenced by an Award Agreement that shall
specify the exercise price, the term of the SAR, the conditions of exercise,
and such other terms and conditions as the Committee, in its sole discretion,
shall determine.


 


6.4                                 Expiration of SARs.  A
SAR granted under the Plan shall expire upon the date determined by the
Committee, in its sole discretion, and set forth in the Award Agreement.  Notwithstanding the foregoing, the rules of
Section 5.4 also shall apply to SARs.


 


6.5                                 Payment of SAR Amount. 
Upon exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:


 


(a)                                  The difference between the Fair Market Value
of a Share on the date of exercise over the exercise price; times


 


(b)                                 The number of Shares with respect to which
the SAR is exercised.


 


6.6                                 Payment Upon Exercise of SAR. At the discretion of the Committee, payment
for a SAR may be in cash, Shares or a combination thereof.


 


SECTION 7

RESTRICTED STOCK


 


7.1                                 Grant of Restricted Stock. 
Subject to the terms and provisions of the Plan, the Committee, at any
time and from time to time, may grant Shares of Restricted Stock to Employees
and Consultants in such amounts as the Committee, in its sole discretion, shall
determine.  The Committee, in its sole
discretion, shall determine the number of Shares to be granted to each
Participant, provided that during any Fiscal Year, no Participant shall be
granted more than 400,000  Shares
of Restricted Stock.


 


7.2                                 Restricted Stock Agreement. 
Each Award of Restricted Stock shall be evidenced by an Award Agreement
that shall specify the Period of Restriction, the number of Shares granted, any
price to be paid for the Shares, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.  Unless the Committee determines otherwise, Shares of Restricted
Stock shall be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.


 


7.3                                 Transferability. 
Shares of Restricted Stock may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period
of Restriction.


 


7.4                                 Other Restrictions.  The
Committee, in its sole discretion, may impose such other restrictions on Shares
of Restricted Stock as it may deem advisable or appropriate, in accordance with
this Section 7.4.


 


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7.4.1                        General
Restrictions.  The
Committee may set restrictions based upon the achievement of specific
performance objectives (Company-wide, business unit or individual), applicable
federal or state securities laws, or any other basis determined by the
Committee in its discretion.


 


7.4.2                        Legend on
Certificates.  The
Committee, in its discretion, may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.  For example, the Committee may determine
that some or all certificates representing Shares of Restricted Stock shall
bear the following legend:


 


“The sale or other transfer
of the shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on
transfer as set forth in the Varian Medical Systems, Inc. Omnibus Stock Plan,
and in a Restricted Stock Agreement.  A
copy of the Plan and such Restricted Stock Agreement may be obtained from the
Secretary of Varian Medical Systems, Inc.”


 


7.5                                 Removal of Restrictions. 
Shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall be released from escrow as soon as practicable after the
last day of the Period of Restriction. 
The Committee, in its discretion, may accelerate the time at which any
restrictions shall lapse, and remove any restrictions.  After the restrictions have lapsed, the
Participant shall be entitled to have any legend or legends under
Section 7.4 removed from his or her Share certificate, and the Shares
shall be freely transferable by the Participant.


 


7.6                                 Voting Rights. 
During the Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those Shares, unless otherwise provided in the Award Agreement.


 


7.7                                 Dividends and Other Distributions. 
During the Period of Restriction, Participants holding Shares of
Restricted Stock shall be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the
Award Agreement.  If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.


 


7.8                                 Return of Restricted Stock to Company.  On
the date set forth in the Award Agreement, the Restricted Stock for which
restrictions have not lapsed shall revert to the Company and again shall become
available for grant under the Plan.


 


SECTION 8

PERFORMANCE UNITS AND PERFORMANCE SHARES


 


8.1                                 Grant of Performance Units and Shares. 
Performance Units and Performance Shares may be granted to Employees and
Consultants at any time and from time to time, as shall be determined by the
Committee, in its sole discretion.  The
Committee shall have complete discretion in determining the number of
Performance Units and Performance Shares granted to any Participant, provided
that during any Fiscal Year, no more than 400,000 Performance Shares or
Performance Units may be granted to any Participant.


 


8.2                                 Initial Value. 
Each Performance Unit shall have an initial value that is established by
the Committee on or before the Grant Date, provided that such value shall not
exceed the Fair Market Value of a Share on the Grant Date.  Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the Grant Date.


 


8.3                                 Performance Objectives and Other Terms.  The
Committee shall set performance objectives in its discretion which, depending
on the extent to which they are met, will determine the number or value of
Performance Units or Shares that will be paid out to the Participants.  The Committee may set performance objectives
based upon the achievement of Company-wide, business unit, or individual goals,
or any other basis


 


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determined by the Committee
in its discretion.  The time period
during which the performance objectives must be met shall be called the
“Performance Period.”  Each Award of
Performance Units or Shares shall be evidenced by an Award Agreement that shall
specify the Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.


 


8.3.1                        General
Performance Objectives.  The
Committee may set performance objectives based upon the achievement of
Company-wide, business unit or individual goals, or any other basis determined
by the Committee in its discretion.


 


8.4                                 Earning of Performance Units and Performance
Shares.  After the applicable Performance Period has
ended, the Participant shall be entitled to receive a payout of the number of
Performance Units or Shares earned during the Performance Period, depending
upon the extent to which the applicable performance objectives have been
achieved.  After the grant of a
Performance Unit or Share, the Committee, in its sole discretion, may reduce or
waive any performance objectives for Award.


 


8.5                                 Form and Timing of Payment. 
Payment of earned Performance Units or Performance Shares shall be made
as soon as practicable after the expiration of the applicable Performance
Period.  The Committee, in its sole
discretion, may pay such earned Awards in cash, Shares or a combination
thereof.


 


8.6                                 Cancellation.  On
the date set forth in the Award Agreement, all unearned or unvested Performance
Units or Performance Shares shall be forfeited to the Company, and again shall
be available for grant under the Plan.


 


SECTION 9

MISCELLANEOUS


 


9.1                                 No Effect on Employment or Service. 
Nothing in the Plan shall interfere with or limit in any way the right
of the Company to terminate any Participant’s employment or service at any
time, with or without cause.  For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. 
Employment with the Company and its Affiliates is on an at-will basis
only.


 


9.2                                 Participation.  No
Employee or Consultant shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a
future Award.


 


9.3                                 Indemnification. 
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from (a) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan or any Award Agreement, and (b) from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him
or her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by
contract, as a matter of law, or otherwise, or under any power that the Company
may have to indemnify them or hold them harmless.


 


9.4                                 Successors.  All obligations of the
Company under the Plan, with respect to Awards granted hereunder, shall be
binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business or assets of the
Company.


 


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9.5                                 Beneficiary Designations.  If
permitted by the Committee, a Participant under the Plan may name a beneficiary
or beneficiaries to whom any vested but unpaid Award shall be paid in the event
of the Participant’s death.  Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee.  In the absence of any such designation, any
vested benefits remaining unpaid at the Participant’s death shall be paid to
the Participant’s estate and, subject to the terms of the Plan and of the
applicable Award Agreement, any unexercised vested Award may be exercised by
the administrator or executor of the Participant’s estate.


 


9.6                                 Nontransferability of Awards.  No
Award granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will, by the laws of descent
and distribution, or to the limited extent provided in Section 9.5.  All rights with respect to an Award granted
to a Participant shall be available during his or her lifetime only to the
Participant.


 


9.7                                 No Rights as Stockholder. 
Except to the limited extent provided in Sections 7.6 and 7.7, no
Participant (nor any beneficiary) shall have any of the rights or privileges of
a stockholder of the Company with respect to any Shares issuable pursuant to an
Award (or exercise thereof), unless and until certificates representing such
Shares shall have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Participant (or
beneficiary).


 


9.8                                 Withholding Requirements. 
Prior to the delivery of any Shares or cash pursuant to an Award (or exercise
thereof), the Company shall have the power and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Participant’s
FICA obligation) required to be withheld with respect to such Award (or
exercise thereof).  Notwithstanding any
contrary provision of the Plan, if a Participant fails to remit to the Company
such withholding amount within the time period specified by the Committee (in
its discretion), the Participant’s Award may, in the Committee’s discretion, be
forfeited and in such case the Participant shall not receive any of the Shares
subject to such Award.


 


9.9                                 Withholding Arrangements.  The
Committee, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit or require a Participant to satisfy all
or part of the tax withholding obligations in connection with an Award by (a)
having the Company withhold otherwise deliverable Shares, or (b) delivering to
the Company already-owned Shares having a Fair Market Value equal to the amount
required to be withheld.  The amount of
the withholding requirement shall be deemed to include any amount which the
Committee determines, not to exceed the amount determined by using the maximum
federal, state, local and foreign jurisdiction marginal income tax rates
applicable to the Participant with respect to the Award on the date that the
amount of tax to be withheld is to be determined.  The Fair Market Value of the Shares to be withheld or delivered
shall be determined as of the date that the taxes are required to be withheld.


 


9.10                           Deferrals.  The Committee, in its sole
discretion, may permit a Participant to defer receipt of the payment of cash or
the delivery of Shares that would otherwise be delivered to a Participant under
the Plan.  Any such deferral elections
shall be subject to such rules and procedures as shall be determined by the
Committee in its sole discretion.


 


SECTION 10

AMENDMENT,
TERMINATION AND DURATION


 


10.1                           Amendment, Suspension or Termination.  The
Board, in its sole discretion, may amend or terminate the Plan, or any part
thereof, at any time and for any reason. The amendment, suspension or
termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award theretofore granted
to such Participant.  No Award may be
granted during any period of suspension or after termination of the Plan.


 


10.2                           Duration of the Plan.  The
Plan shall commence on the date specified herein, and subject to
Section 10.1 (regarding the Board’s right to amend or terminate the Plan),
shall remain in effect thereafter.


 


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Section 11

LEGAL
CONSTRUCTION


 


11.1                           Gender and Number. 
Except where otherwise indicated by the context, any masculine term used
herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.


 


11.2                           Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.


 


11.3                           Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.


 


11.4                           Governing Law.  The
Plan and all Award Agreements shall be construed in accordance with and
governed by the laws of the State of California, but without regard to its
conflict of law provisions.


 


11.5                           Captions.  Captions are provided herein
for convenience only, and shall not serve as a basis for interpretation or
construction of the Plan.


 


EXECUTION


 


IN WITNESS WHEREOF, Varian
Medical Systems, Inc., by its duly authorized officer, has executed the Plan on
the date indicated below.


 


	
   

  	
  VARIAN MEDICAL SYSTEMS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:  July 30, 2004

  	
  By 

  	
  /s/
  Joseph B. Phair

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joseph B. Phair

  
	
   

  	
   

  	
  Title:

  	
  Vice President,
  Administration,

  General Counsel & Secretary

  
					



 


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